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[VT2VA]

Although it's beside the point, there is bidding because most offered sales on Folio are run as auctions.

You can shill by buying and selling notes to one another, thereby inflating trading volume.  Prosper would benefit if it can show potential lenders an active secondary market.  Also, Prosper might have guaranteed a minimum level of volume to Foliofn, so Prosper could kill two birds with one stone by having its people buy and sell notes.  Maybe happening, maybe not, but I wouldn't put it past them.

[Fred93]

You can shill by buying and selling notes to one another, thereby inflating trading volume.  Prosper would benefit if it can show potential lenders an active secondary market. 

Yes, but I haven't seen any statistics of any kind from the Prosper secondary market.  Have I missed something?

[baeventures]

I sold a crap ton of AA notes to blot44 when Folio first launched. I watched for 2 weeks and saw that blot44 was buying virtually all AA notes that had a yield greater than 9%. So I went on Prosper and bought $50 portions of every AA note with a yield greater than 9% that was 80% funded or greater. He would pay a 3.5% premium for these notes. Did this for about 3 months, and would have been a viable short term money making option if loan volume on Prosper was higher (made about $160 in premiums in 3 months).

BAEVentures

[baeventures]

Alright so Prospers income from loan originations would look something like this:

($1,718,105 * .25) * .005 = $2,147.63
($1,718,105 * .75) * 0.03 = $38.657.36
Total = $40,804.99 Only $500,000 to go!

[ira01]

Alright so Prospers income from loan originations would look something like this:

($1,718,105 * .25) * .005 = $2,147.63
($1,718,105 * .75) * 0.03 = $38.657.36
Total = $40,804.99 Only $500,000 to go!

You forgot that WebBank probably doesn't originate the loans for free -- they probably get most of the origination fee.

[blue]

So in trying to figure Prospers Monthly income - they get loan originations & loan servicing?

1) Any other income?
2) So what % does Webbank get of the originations? (or a flat fee?)
3) How roughly is Prosper getting monthly from loan servicing?

[zapp05]

3) How roughly is Prosper getting monthly from loan servicing?

ok, i'll take a crack at this with Eric's...  $20,000

* all loans before 2/12/2007 have .5% lender servicing fee
    - the 3 years is up on these, so there are no current loans.
    - $0.00

* B-HR loans after 2/12/2007 have 1% lender servicing fee
    - there is just over $37,000,000 in current loans
    - $370,000

* AA-A loans between 2/12/2007 & 10/30/2007 have .5% lender servicing fee
    - there is just over $4,000,000 in current loans
    - $20,000

* A loans after 10/30/2007 have 1% lender servicing fee
    - there is just over $10,000,000 in current loans
    - $100,000

* AA loans after 04/15/2008 have 1% lender servicing fee
    - there is just over $11,000,000 in current loans
    - $110,000

for a grand total of about $600,000 in lender servicing fees.
so, if we "roughly" break it up into an even 36 installments (a gross exageration due to decreasing principal, but whatever).
- let's round it up to $20,000 per month

did i even get close??

[Senator]

let's round it up to $20,000 per month

did i even get close??

Enough to pay 2 employees?

[God-Father]

Only 1 employee by the time they pay taxes and benefits.

[Senator]

Only 1 employee by the time they pay taxes and benefits.

Why would they pay those?

[xraider]

Zapp, OUCH!  If those numbers are anywhere close to accurate, no wonder Prosper is struggling, and raising loan initiation fees.  That shows, very starkly, that Prosper is not sustainable.

I wonder if any of these late loans really ARE paying Prosper, and Prosper is diverting the money to its own needs and just TELLING us the loans are late, or have defaulted?    

[God-Father]

IMHO that is extremely doubtful.

[ira01]

3) How roughly is Prosper getting monthly from loan servicing?

ok, i'll take a crack at this with Eric's...  $20,000

* all loans before 2/12/2007 have .5% lender servicing fee
    - the 3 years is up on these, so there are no current loans.
    - $0.00

* B-HR loans after 2/12/2007 have 1% lender servicing fee
    - there is just over $37,000,000 in current loans
    - $370,000

* AA-A loans between 2/12/2007 & 10/30/2007 have .5% lender servicing fee
    - there is just over $4,000,000 in current loans
    - $20,000

* A loans after 10/30/2007 have 1% lender servicing fee
    - there is just over $10,000,000 in current loans
    - $100,000

* AA loans after 04/15/2008 have 1% lender servicing fee
    - there is just over $11,000,000 in current loans
    - $110,000

for a grand total of about $600,000 in lender servicing fees.
so, if we "roughly" break it up into an even 36 installments (a gross exageration due to decreasing principal, but whatever).
- let's round it up to $20,000 per month

did i even get close??

I see two errors here.  The biggest one is that the 1% or whatever servicing fee is annual, not life of the loan.  Thus, your $600K should be divided by 12, not by 36.  The second is that you appear to be missing some of the active loans -- Prosper's performance page lists $65.4M in active, <1 month late loans, while you only have $62M.  Of Prosper's $65.4M, if we subtract your $4M in .5% fee loans, that is $614K from the 1% fee loans, and another $20K in .5% fee loans, for a total of $634K per year.  That is about $53K per month.  Still crappy, but almost triple what you came up with.

[ira01]

I wonder if any of these late loans really ARE paying Prosper, and Prosper is diverting the money to its own needs and just TELLING us the loans are late, or have defaulted?    

As awful as Prosper is, I highly doubt it.  That would be outright theft, and would land Prosper employees in prison.  And we would probably find out about it -- eventually a borrower would provide evidence that they had been paying but Prosper nevertheless reported them as defaulted/delinquent, and we would go to the police.

[xraider]

Ira, maybe that's why they've stopped reporting?   

(Ira, I'm not serious.....)